Nigeria’s Cybersecurity Levy: What It Means for Small Market Women and Their Businesses

The Nigeria cybersecurity levy of CBN to banks is a 0.5% levy on all electronic transactions, as mandated by the 2024 Cybercrime (Prohibition, Prevention, etc.) Amendment Act ¹ ² ³ ⁴ ⁵. The key points of this levy are as follows:

  • Levy Application: A 0.5% levy of all electronic transactions’ value is to be deducted and remitted to the National Cybersecurity Fund (NCF).
  • Implementation Process: Financial institutions are required to deduct the levy at the point of electronic transfer origination and reflect it in the customer’s account with the narration ‘Cybersecurity Levy.’
  • Remittance Procedure: Deductions will commence within two weeks of the circular, with monthly remittances to the NCF account domiciled at the CBN by the 5th business day of every subsequent month.
  • Exemptions: The Circular lists 16 specific transactions that are exempted from the levy, including loan disbursements and repayments, salary payments, intra-account transfers within the same bank or between different banks of the same customer, intra-bank transfers between customers of the same bank, Cheques clearing and settlements, letters of credits, and transactions relating to education.
  • Penalties for Non-compliance: Non-compliance attracts a fine, on conviction, of not less than 2% of the defaulting business’ annual turnover.

In summary, the Nigeria cybersecurity levy of CBN to banks is a 0.5% levy on all electronic transactions to be deducted and remitted to the National Cybersecurity Fund (NCF). The levy aims to ensure dedicated and adequate funding to address the growing threats of cyber-attacks. However, there are exemptions and penalties for non-compliance.

The implications of the Nigeria cybersecurity levy on small market women are:

  1. Increased transaction costs: The 0.5% levy on electronic transactions may lead to higher transaction costs for small market women, who may already operate on thin profit margins.
  2. Reduced profit margins: The levy may reduce their profit margins, making it harder for them to sustain their businesses.
  3. Cash-based transactions: Small market women may opt for cash-based transactions to avoid the levy, which could limit their access to digital financial services and potentially increase their vulnerability to theft and fraud.
  4. Exclusion from digital economy: The levy may exacerbate the existing gender gap in the digital economy, potentially excluding small market women from accessing digital financial services and participating in the formal economy.
  5. Increased burden: The levy may add to the existing burdens faced by small market women, including high interest rates, limited access to credit, and inadequate business support.
  6. Limited financial inclusion: The levy may undermine efforts to promote financial inclusion, as small market women may be discouraged from using digital financial services due to the additional cost.
  7. Impact on livelihoods: The levy may have a direct impact on the livelihoods of small market women, potentially leading to reduced income, decreased economic empowerment, and increased poverty.

To mitigate these implications, it’s essential to consider the potential impacts on small market women and explore strategies to support their inclusion in the digital economy, such as:

  1. Exemptions or reduced rates: Consider exempting small market women or offering reduced levy rates for their transactions.
  2. Financial education and support: Provide access to financial education, credit, and other business support services to help them navigate the digital economy.
  3. Digital literacy training: Offer training and resources to help small market women develop digital literacy skills and confidently use digital financial services.
  4. Inclusive policy-making: Involve small market women in policy-making processes to ensure their perspectives and needs are considered in the development of regulations and initiatives.

The implications of the Nigeria cybersecurity levy on small market women are:

  1. Increased transaction costs: The 0.5% levy on electronic transactions may lead to higher transaction costs for small market women, who may already operate on thin profit margins.
  2. Reduced profit margins: The levy may reduce their profit margins, making it harder for them to sustain their businesses.
  3. Cash-based transactions: Small market women may opt for cash-based transactions to avoid the levy, which could limit their access to digital financial services and potentially increase their vulnerability to theft and fraud.
  4. Exclusion from digital economy: The levy may exacerbate the existing gender gap in the digital economy, potentially excluding small market women from accessing digital financial services and participating in the formal economy.
  5. Increased burden: The levy may add to the existing burdens faced by small market women, including high interest rates, limited access to credit, and inadequate business support.
  6. Limited financial inclusion: The levy may undermine efforts to promote financial inclusion, as small market women may be discouraged from using digital financial services due to the additional cost.
  7. Impact on livelihoods: The levy may have a direct impact on the livelihoods of small market women, potentially leading to reduced income, decreased economic empowerment, and increased poverty.

To mitigate these implications, it’s essential to consider the potential impacts on small market women and explore strategies to support their inclusion in the digital economy, such as:

  1. Exemptions or reduced rates: Consider exempting small market women or offering reduced levy rates for their transactions.
  2. Financial education and support: Provide access to financial education, credit, and other business support services to help them navigate the digital economy.
  3. Digital literacy training: Offer training and resources to help small market women develop digital literacy skills and confidently use digital financial services.
  4. Inclusive policy-making: Involve small market women in policy-making processes to ensure their perspectives and needs are considered in the development of regulations and initiatives.

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